The last adjustment was in 1985. It set the current standard of $750,000 for general freight, $5 million for the most dangerous hazmats and $1 million for other hazmats.

The agency has formed a team to draft a new rule and considers this a high priority.

This initiative arises from a study ordered by Congress in the 2012 highway law, MAP-21, in response to the increasing costs of crashes. As it drafted the law, Congress considered raising the insurance minimum for general freight from $750,000 to $1 million, but eventually decided to have the agency prepare an analysis that could become the basis for changes in the standard. Congress also ordered the agency to conduct a review every four years, going forward.

The agency found that catastrophic crashes whose costs exceed current minimums are rare – just 1% of crashes fall into that category. But when they do happen the costs can easily exceed the current $1 million minimum.

This is due mainly to increased medical costs. The medical consumer price index has outpaced inflation in all but one of the past 29 years, the agency said.

If the minimums were pegged to the medical CPI, general freight would require $3.2 million, dangerous hazmats would require $21.3 million and other hazmats would require $4.3 million.

Even if the minimums were pegged to the lesser standard of core CPI, they still would be significantly higher: $1.6 million for general freight, $10.8 million for dangerous hazmats and $2.2 million for other hazmats.

The agency also found that insurance rates have declined slightly since the 1980s, and that it is difficult to find data on what premiums would cost if the minimums are increased. Insurers are protective of their clients and pricing, so information about costs is generic and limited, the agency said.

The study focused mainly on freight carriers but it applicable to buses and hazmat carriers as well, the agency said.

The agency said its research is supplemented by findings in other studies.

One 2013 study by the Pacific Institute for Research and Evaluation recommended a minimum of $10 million, to be indexed to inflation and productivity growth.

The amounts in these settlements were enough to create an uninsured liability of 42% for the companies, the Trucking Alliance found.

An American Trucking Associations review offered a different take on the issue. ATA looked at the risk of a carrier experiencing a crash whose costs exceed the minimums. It found a 1.4% chance of a claim exceeding $500,000, a 0.73% chance of going over $1 million and a 0.31% chance of going over $2 million. The average cost of claims between 2006 and 2011 was $11,229, ATA found.

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Comments

1.Harold Sumerford[ April 22, 2014 @ 03:25AM ]

At the same time, they should raise the limits on the general public to ease the burden of "under insured" motorist.

2.Laughlin[ April 22, 2014 @ 03:59AM ]

The taxes, the insurance, the cost of fuel and maintenance and repairs, EPA particulate filters, generators, restrictions on driving tomes and hours of service, etc, etc. why bother to stay in this business? The expenses keep ballooning and the rates definitely don't. We fight to find freight paying the same rates that we got seven years ago. Not really worth it anymore.

3.Clyde C. Kerns[ April 22, 2014 @ 04:07AM ]

Another tremendously inflationary suggestion from FMSCA and congress. Perhaps we should be discussing tort reform. The amounts suggested in the article would immediately reduce the number of trucks available to operate on the nations highways and would immediately increase the amount of often unwarranted settlements not to mention dramatically increase freight rates. Please can any reason and prudence flow out of Washington's think tanks?

4.Gary Meier[ April 22, 2014 @ 04:13AM ]

The writer from Laughlin hit the nail on the head, the people who gain on this increase is not the injured it is the Democratic Gov. and Insurance CO's, if this type of constant increases on the basic operating expenses of the trucking industry it is going to cause a major economical impact on the country as the drivers start to refuse to haul freight do to excessive cost, beware Democratic Government

5.dan[ April 22, 2014 @ 05:01AM ]

Follow the money. The congressman mention at the end of the article made his living from suing truckers involved in accidents. That a fact jack.

6.Amish Trucker[ April 22, 2014 @ 05:16AM ]

Also not mentioned in the article is the percentage of current carriers who are already at the one million level. To determine the cost increase, FMCSA could poll carriers and determine the difference in premiums. However anyone who has completed a liability application understands it may be difficult to do apples to apples comparison between carriers. Perhaps carrier rates should be tied to the medical CPI as well. This is just another attempt by the larger carriers to push the small carriers out of business. Hiding again behind "safety" and a "level playing field."

7.Steve[ April 22, 2014 @ 05:20AM ]

Just 1 more reason to tell the Government to Kiss my A$$. 42 year's of this Crap is Enough

8.Brian Loysen[ April 22, 2014 @ 05:30AM ]

Here is more garbage thrown onto this industry.It is fact that most crashes are caused by the passenger car. Where is the study on damage done to this industry from the general public?The general public gets all the protection from the big bad trucker and that is why they drive the way they do. What about the tuckers problems when he gets hit? Why aren't regular drivers required to carry commercial liability if they cause damage to a truck who i s an owner/operator since that is his rolling business?The FMCSA continues to apply any regulatory changes only to trucking. It is exactly why when you call any localities traffic violation line a commercial violation inspection fine can be two to three times the fine for a at fault accident citation for a passenger car...if not in more "fair" places where it would be equal. This is the message from the government: One marker light is worth more than a passenger car crash.

9.Ben[ April 22, 2014 @ 06:02AM ]

How about FMCSA and Congress doing something about tort reform. Again, the FMCSA is on the attack. Ferro said to a group of carrier exec's last year, she has a "lot on her plate". And these are regulations not favorable to our industry. She continues to treat symptoms without looking at root cause.

10.JoJo[ April 22, 2014 @ 09:57AM ]

Another Fact that the article does not say, That Cartwright is a Lawyer. His Father in Law 's Law Firm in N E Pa main business Is truck or any commercial vehicle accident litigation . Pretty Ironic .

11.Deny Dolman[ April 26, 2014 @ 08:38AM ]

It is all so to stop all the small trucking company's and have only the big company's left

12.lastgoodusername[ April 27, 2014 @ 04:49PM ]

long live the queen.another solution looking for a problem.

13.haller[ May 21, 2014 @ 05:05AM ]

For one truck and one refer trailer I pay $6200 per year for $1,000,000 includes $100,000 cargo also refer breakdown, no hazmat.. for around 100,000 miles per year in a 7 state authority area. You can figure out what more ins. would cost with these figures..

14.Lee Saurdiff[ November 26, 2014 @ 01:49PM ]

Fine but make all car owner carry million dollars of insurance. they cause more death on the roads. then class 8 trucks do. best is that most car owner are grossly under insured or no insurance at all. Or are you to chicken to go after the cause of the problem?Lee

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